The Government Expects Diesel Stocks to Fall Below 100 Million Barrels Next Month. That Last Happened in 2003.

Two of the world's most-watched oil forecasts were published two days apart last week, and they describe the same problem from opposite ends. The U.S. Energy Information Administration's Short-Term Energy Outlook, released on September 9, expects American distillate inventories to drop below 100 million barrels in October — a threshold the agency says has not been crossed since 2003. The International Energy Agency's Oil Market Report, published on September 11, put a number on the global version of the same squeeze: observed inventories worldwide have fallen 507 million barrels since February.

Distillate is the category that covers diesel and heating oil. It is the fuel that moves freight, runs farm equipment and heats homes in the Northeast, which is why a distillate shortage shows up in prices well beyond the pump.

What the two reports say

• EIA: U.S. distillate inventories fall below 100 million barrels in October 2026, the first time since 2003.
• EIA: retail diesel averages $5.55 a gallon in the fourth quarter of 2026, then $4.40 a gallon across 2027.
• EIA: Brent crude averages $91 a barrel in 2026 and $74 a barrel in 2027.
• IEA: global observed inventories are down 507 million barrels since February, an average draw of 2.8 million barrels a day; August alone accounted for a 95 million barrel decline.
• IEA: world oil supply falls to 100.7 million barrels a day in 2026, down 5.7 million barrels a day from a year earlier.
• IEA: global refinery throughput falls 2.6 million barrels a day in 2026, to 81.5 million barrels a day.

Why the refining number matters more than the crude number

Crude oil and diesel are not the same market, and this year they have come apart. The IEA's figures show refinery runs falling by 2.6 million barrels a day in 2026. Less crude processed means less diesel produced, regardless of how much crude is available to buy. The agency attributes the constraint to a combination of factors: an impasse in U.S.-Iran negotiations, security disruptions in the Middle East, Red Sea tensions, and damage to refining capacity and product exports tied to the Russia-Ukraine conflict.

The result is visible in the spread between crude and the fuel made from it. The IEA reports that U.S. diesel and gasoil prices passed $200 a barrel in early September, which it describes as 94% above pre-war levels. Crude has moved too, but not by that much: North Sea Dated averaged $91.00 a barrel in August and reached $113.48 by September 9, according to the same report.

The two forecasts do not agree about next year

On 2027, the reports point in the same direction but at different speeds. The EIA has Brent falling to $74 a barrel as production recovers. The IEA expects demand to rebound by 2.6 million barrels a day while production rebounds by 8 million barrels a day, with what it calls the Americas Quintet adding 1 million barrels a day to non-OPEC+ output. A supply recovery that outpaces demand by that margin would rebuild the inventories drawn down all year.

There is also a gap inside the numbers already published. The EIA's $91 Brent average for 2026 sits well below the $113.48 the IEA recorded for North Sea Dated on September 9. That is not necessarily a contradiction — an annual average absorbs eight quieter months — but it does mean the EIA's full-year figure implies prices below current levels for the rest of 2026.

What else the EIA published

The same outlook forecasts U.S. electricity generation reaching a record 4,368 billion kilowatthours in 2026, up 2.2%, with another 1.7% of growth in 2027. The agency attributes the increase to data center development and manufacturing activity. Henry Hub natural gas is forecast at $3.43 per million BTU in 2026 and $3.28 in 2027, with LNG exports rising from 17 billion cubic feet a day to 19.

This article is for informational purposes and does not constitute investment advice. Both agencies publish full data tables alongside the reports cited below.